Analysis of 60 monthly rates of return on United Futon common stock indicates a beta of 1.58 and an alpha of -0.33% per month. A month later, the market is up by 6.3%, and United Futon is up by 7.3%. What is Futon's abnormal rate of return? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct.

Analysis of 60 monthly rates of return on United Futon common stock indicates a beta of 1.58 and an alpha of -0.33% per month. A month later, the market is up by 6.3%, and United Futon is up by 7.3%. What is Futon's abnormal rate of return? (A negative answer should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter8: Basic Stock Valuation

Section: Chapter Questions

Problem 8P: A stock is trading at $80 per share. The stock is expected to have a yearend dividend of $4 per...

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